The ratio of non-performing loans (NPLs) to all loans in banks operating in the Egyptian market declined to 2.6% by the end of March 2019, up from 2.4% in December 2018, according to the Central Bank of Egypt (CBE).

In its quarterly report on the financial position of banks, the CBE said that NPLs reached 3.1% at the top 10 banks and 2.6% at the top five banks.

The CBE noted that banks secured provisions of 98% of total NPLs at the end of March 2019. The ratio reached 100% at the 10 and five largest banks.

“The provisions secured by banks to combat bad debt reached EGP 121.717bn at the end of March 2019, of which the largest 10 banks accounted for EGP 77.818bn, while the largest five banks’ NPL provisions reached EGP 62.375bn,” the CBE’s report read.

It added that the banks’ reserves reached EGP 173.223bn at the end of March 2019, with the top five banks recording EGP 153.558bn, and the top 10 banks had EGP 185.966bn.

According to the CBE, the loans to deposits ratio (LDR) in banks operating in the Egyptian market increased to 47.5% in March 2019 from 47.8% in December 2019. The ratio stood at 46.2% in the top 10 banks, and 47.2% at the top five.

The CBE noted that the LDR in local currency reached 40.1% in March 2019, from 39.3% in December 2018. Meanwhile the LDR in the top 10 banks stood at 36.6%, and 36.1% in the top five.

Likewise, foreign currencies’ LDR fell in March to 73.7%, compared to 76.7% in December 2018. The ratio registered 92.8% in the top 10 banks, and 80.5% in the top five.

“The private sector has taken over 59.9% of total loans granted by banks to their clients at the end of March 2019, against 58.7% in December 2018,” the CBE stated.

It added that the private sector has acquired 52.4% of the total loans in the top 10 banks, and 48.8% of the loans in the top five banks.

“The total deposits in banks until the end of March 2019 amounted to EGP 3.914tn, including EGP 2.895tn in the top 10 banks, and EGP 2.46tn in the top five,” noted the CBE.

Furthermore, the ratio of bank deposits to assets in March reached 69.3%, against 70.2% in December. The ratio reached 67.5% in the top 10 banks, and 66.5% in the top five.

The average liquidity ratio in local currency in banks fell to 43.4% down from 44.3% in December, scoring 46.5% in the top 10 banks, and 44% in the top five.

Moreover, the average foreign currency liquidity ratio fell to 65.7% in March against 59.7% in December. This ratio stood at 63.1% in the top 10 and top five banks.

On a different note, the CBE said that banks’ securities portfolios reached about 15.8% of total assets in banks in March against 16.2% in December 2018. The ratio stood at 17.1% in the top 10 banks, and 18.2% in the top five.

Moreover, according to the CBE, banks’ investments in securities and treasury bills (T-Bills) reached EGP 1.767tn at the end of March 2019, amounting to EGP 1.359tn in the top 10 banks, and EGP 1.171tn in the top five banks.

“The total capital of banks operating in the Egyptian market amounted to EGP 152.694bn at the end of March 2019,” the report stated.

It also highlighted that the capital of the top 10 banks amounted to EGP 101.053bn while the top five banks’ capital reached EGP 83.04bn.

The CBE did not disclose the names of those five or ten banks; however, the market names the National Bank of Egypt; Banque Misr; Commercial International Bank (CIB); Banque du Caire; QNB AlAhli; the Arab African International Bank; HSBC; Faisal Islamic Bank; AlexBank, and Credit Agricole.

Regarding the banks’ capital adequacy index, the CBE explained that the capital to risk-weighted assets ratio (CRAR) in banks increased to 16.5% at the end of March 2019 up from 16.2% by the end of December 2018. The ratio scored 16.4% in the top 10 banks, and 16.4% in the top five.

The tier 1 capital to risk-weighted assets scored 13.5% in March against 13.2% in December 2018 amounting to 13.3% in the top 10 banks, and 13.15% at the top five.

The continuing CRAR reached 10.3% in March 2019 against 9.6% in December 2018, reaching 9.7% in the top 10 banks, and 9.1% in the top five banks, according to the CBE.

The rate of leverage in banks reached 6.6% in March against 6.6% in December. This ratio reached 6.2% in the top 10 banks, and 5.9% in the top five banks.

The percentage is recommended starting from the end of September 2015 until 2017 and is obligatory starting from 2018, with a lower margin of 3%, as per the CBE’s report.